Loan sharks, unethical and irresponsible are words often used to describe companies within the short term consumer lending space. Service providers, forward thinking and cutting edge are the words I would use to describe these businesses.
Now let me take a step back and explain why I feel this is a valued sector which is offering customers a great and much needed service.
Recent estimates suggest 12 million people in the UK fall into the sub or near prime lending group. In other words, nearly 20% of the UK population are refused by traditional high street banks as they are viewed as “high risk”. This in turn has led to the rise of the payday and short term credit lenders.
Unlike most, I view these businesses as viable lenders who are offering a much needed service to the public neglected by traditional high street banks and building societies. Companies in this space are offering a cutting edge service to customers allowing them to access funds in a short time frame, whilst banks are still getting to grips with the rise of digital and online banking. The consumer lending space is transforming the way consumers access money.
With the FCA now regulating the payday lending space there will be increased scrutiny on lending criteria, treating customers fairly and ensuring consumers aren’t hit with exonerate fees. This will continue to improve the service offered to consumers who may need to access the funds at short notice. With cost of living rising and wages not matching this rise, consumer lenders will continue to be of valued assistance to individuals across the UK and will continue to challenge the high street banking’s lending behaviours. Tighter regulation and huge investment in technology mean that consumer lenders will continue to flourish in the changing world of financial services.